Limited-Time Offer
Moving to a higher-cost area and need a VA jumbo loan? Use your VA benefit to buy a home — with possibly no money down and a more attractive interest rate than other mortgage products. Plus, get a $2,500 lender credit* when you get your loan with AAFMAA Mortgage Services LLC (AMS).
Increase Your Buying (and Selling) Power with a VA Jumbo Loan
VA Home Loans are a popular option for qualifying active-duty servicemembers and Veterans who, along with eligible spouses, can enjoy putting zero down and getting a competitive mortgage interest rate.
VA Home Loans are available through approved lenders like AMS and can have fixed or adjustable interest rates. But what happens if you live in an expensive area or just need a loan that’s a little bit larger?
A VA jumbo loan can help you buy or refinance that special home at a rate very similar to that of a regular VA loan, with possibly no down payment and no private mortgage insurance (PMI) — and it’s assumable. That means you can assume a mortgage that originated when rates were closer to 3% than 7%, which would be highly beneficial in the current high-interest rate market.
If you think you’d like the opportunity for a little more house with all the same benefits of a VA Home Loan, take a look below for a breakdown to help you decide whether this option makes sense for you.
Related: VA Home Loan vs Conventional Loan
What Is a Jumbo Loan?
A jumbo loan is a non-conforming loan, meaning it doesn’t meet the purchase guidelines used by Fannie Mae and Freddie Mac, the government-sponsored enterprises (or GSEs).
The Federal Housing Finance Agency (FHFA) publishes annual conforming loan limit values for all conventional loans delivered to the GSEs. These include baseline and high-cost area loan limits.
High-cost areas are defined by their geographic location.
In 2024, the conforming loan limit for a single-family home in most states is $766,550. Several states (including Alaska and Hawaii), Guam, Puerto Rico, and the U.S. Virgin Islands have higher loan limits. Most lenders consider a VA Home Loan a jumbo mortgage if it exceeds local conforming loan limits.
How Much Can I Borrow?
Although, technically, VA Home Loans don’t have limits, the VA does limit how much it will guarantee and that’s generally up to 25% of the loan amount. That limit would protect your lender if you were to stop making payments on your loan.
Although, technically, VA Home Loans don’t have limits, the VA does limit how much it will guarantee and that’s generally up to 25% of the loan amount. That limit would protect your lender if you were to stop making payments on your loan.
The amount the VA will guarantee hinges on your VA entitlement. Most people receive a full entitlement, so the VA will guarantee 25% of whatever a lender is willing to approve for you. If your COE (Certificate of Eligibility) says that you have an amount less than $36,000, it’s considered remaining entitlement or impacted entitlement, which makes you subject to a loan limit if you want to buy a home without a down payment.
If you’re unsure whether you have full entitlement, you can look at your COE. If your basic entitlement is $36,000, you have full entitlement.
You can use your VA entitlement an unlimited number of times as long as the VA loan is fully paid off each time when you sell the home.
Related: Thinking About an Adjustable-Rate Mortgage? Here’s What You Need to Know
VA Jumbo Loan Benefits
With higher loan amounts and flexible credit requirements, VA jumbo loans can help qualified borrowers purchase more expensive homes without paying for private mortgage insurance (PMI) and with no prepayment penalties.
With higher loan amounts and flexible credit requirements, VA jumbo loans can help qualified borrowers purchase more expensive homes without paying for private mortgage insurance (PMI) and with no prepayment penalties.
To qualify, you’ll need to meet credit requirements set by your lender and have a low debt-to-income (DTI) ratio. AMS qualifies borrowers for VA jumbo loans up to $2 million.
There are just a few additional caveats to know. A VA jumbo loan:
- must be used for primary residences only
- must pass basic inspections for safety and soundness
- may require a termite inspection, depending on the location
VA Funding Fee Requirements
VA Home Loans do not require PMI, as noted above, but they do require a funding fee, generally between 1.25% and 3.3%, which helps fund the loan program. The amount you’ll need to pay varies depending on the size of your down payment (if any) and, in some cases, whether it’s your first use of your entitlement. You can pay the funding fee upfront or finance it into the loan amount.
Refinances or VA Streamlines — also referred to as Interest Rate Reduction Refinance Loans (IRRRLs) — are an exception to the range and have a 0.5% funding fee.
There are some exceptions to having to pay the funding fee. For example, if you’re receiving VA disability payments or if you’re a surviving spouse receiving dependency and indemnity compensation, you may be exempt. An exception also applies if you returned to Active Duty after receiving a Purple Heart.
We’re Here to Help with Your Mortgage
Whether you’re thinking about buying, ready to start home-shopping in earnest, or considering a refinance, an AMS Military Mortgage Advisor will be happy to provide you with an honest and fair comparison of your mortgage options, including a wide range of affordable mortgages designed to meet your needs.
Ensuring AAFMAA Members obtain the best mortgage possible is our mission. Get your free mortgage assessment today or give us a call at 844-422-3622!
*The $2,500 lender credit offer is good on a VA jumbo/high balance mortgage closed before March 31, 2024, and cannot be combined with any other offer. Please see full disclaimer information at https://www.yourmilitarymortgage.com/mortgage-disclaimer.